The traditionally common method of giving them cash for a down payment is trending down.
The survey asked parents of adults age 18-38 whether and how they were expecting to help their children buy their first home in the next five years and compared the results to what parents did in the past five years.
Overall, the number of parents who expect to help their children buy a home in some way grew from 13 percent to 17 percent – a 31 percent increase.
How will they help?
The research showed that:
- 50 percent of parents who expect to help their Millennials buy their first home said they would contribute money for the down payment, a decrease from 65 percent in the past five years.
- Of those parents, 8 percent expect to pitch in at last 90 percent of the down payment, down from nearly 20 percent in the past five years.
- The number of parents expecting to let their kids move back home to save up money for a home jumped from 8 percent to 22 percent.
- The parents expecting to let their kids stay at home to save up for a home tripled, from 11 percent to 33 percent.
- The number of parents willing to cosign a loan is unchanged, with 20 percent in the past and future.
- Roughly 18 percent of parents said they'd help their kids pay down their student loans as a way to help them buy a home, up from 11 percent in the past five years.
Here is a breakdown of how parents of Millennials expect to help their kids buy a home, if they expect to do so:
|
Form of Assistance |
Past Five Years |
Future Purchases (1) |
|
Contribute to Down Payment |
50% |
|
|
Pay Other Expenses so they Can Save Money |
25% |
30% |
|
Help with closing costs |
24% |
20% |
|
Co-sign the mortgage |
21% |
20% |
|
Helped Pay Down Student Loan Debt |
11% |
18% |
|
Continue to live at home to Save Money |
11% |
33% |
|
Moved back home |
8% |
22% |
|
Help pay their rent for a while |
7% |
8% |
(1) More than one option selected by survey participants
Parents and Millennials seem to view the financial assistance differently
The poll, which also interviewed Millennials, indicates that parents and Millennials don’t always view direct financial help on homebuying the same way, with parents tending to view the money as a gift and Millennials tending to view the money as a loan to be repaid. Although the survey did not interview parents and children who were related, it found that:
- Only 11 percent of parents expect to be paid back for their assistance, while 43 percent of their children consider the support a loan to be repaid.
- While 68 percent of parents view the financial support as a gift, only 29 percent of Millennial-aged children agreed.
- 7 percent of Millennials view the financial support as part of or their inheritance, while 17 percent of parents consider their financial support as inheritance related.
About the loanDepot poll
The research, completed Feb. 13, 2015 for loanDepot LLC by GFK Custom Research North America, conducted 1,000 interviews with parents of Millennial-aged children and 1,000 interviews of adults ages 18-38.
A loanDepot licensed loan officer can help with these and any other lending questions. Call (888) 983-3240 to speak with one today.
